Refinery closings pushing gasoline costs higher

As motorists become angry at seeing gasoline prices rise 31.8 cents per gallon in the Oakland County area, they can blame the major oil companies for reducing refinery capacity.

AAA of Michigan said the current statewide average for a gallon of regular gasoline averaged $3.697 in Michigan, up 16.4 cents since the same time last year.

The average price for self-serve regular rose 30.2 cents per gallon in metro Detroit during the past week to average $3.67 per gallon, AAA said Monday. The price is 17 cents more than the comparable year-ago cost for a gallon of fuel.

The most expensive regular gasoline is at $3.728 per gallon in the Grand Rapids area, up nearly 36 cents a gallon in a week, AAA said.

The least costly gas per gallon was $3.594 a gallon in Marquette, in the Upper Peninsula.

"The national average has ticked higher in the last week, as rising oil prices have put upward pressure on gasoline prices," said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan.

"Unfortunately for angry motorists, there doesn't seem to be much relief in sight, at least for the time being, as retail prices continue to climb in virtually all areas of the country," DeHaan said.

At a time when gasoline prices are approaching $4 per gallon, many U.S. refineries are going broke.

Half of the refining capacity on the East Coast shut down because refineries there were unable to compete with Gulf Coast facilities that can refine cheaper oil, according to Lundberg Survey Inc., which tracks prices and events in the oil industry.

Sunoco closed a refinery in the Philadelphia area last year. ConocoPhillips closed its Trainer refinery, also in the Philadelphia area.

The refineries are losing money because they are old and cannot process the cheaper, heavier types of oil that are increasingly in supply from Canada's oil sands, Saudi Arabia, Venezuela and elsewhere.

The Sunoco refineries can process only the types of light, sweet crude imported from West Africa or the North Sea. The term light refers to the oil's density, and sweetness to its sulfur content.

Light, sweet oil is the easiest to turn into gasoline -- but also costs about $20 more per barrel.